No-deal Brexit will bankrupt more than 50 per cent of farms, says top economist – NEWS
More than 50 per cent of farms will go out of business as a result of a no-deal Brexit, a leading economist has warned.
Former NFU chief economist and Government adviser Sean Rickard claimed the loss of export markets, coupled with the removal of direct payments and tariff protection, could kill off upland farming altogether and cause widespread land degradation.
In a report published ahead of the launch of a new campaign group, Farmers for a People’s Vote, Dr Rickard wrote: “Based on the annual Farm Business Survey – which shows on average support payments account for more than 60 per cent of farm incomes – it is very clear the impact of lower farm gate prices together with removal of support payments would render the majority of farm businesses unviable.
“Even though land prices and rents would adjust in response, this would not be sufficient to restore underlying profitability.
“It must therefore be concluded that by the mid-2020s a large proportion of farm businesses – 50 per cent or more is not an unreasonable estimate – recognising they face an unprofitable future, will decide to cease trading.”
Dr Rickard went on to suggest Jeremy Hunt’s pledge to offer a £6bn rescue package for farming and fisheries during the Conservative leadership contest showed he believed a no-deal exit would ‘wipe out’ the agricultural industry’s total annual income of £4.7bn.
Despite this, the report claimed compensation from Government would be very unlikely to offset the losses of farm businesses, and pointed out a fall in the value of the pound would exacerbate farmers’ financial problems because it would increase the price of inputs such as veterinary medicines and plant protection products.
But Rupert Lowe, a farmer and recently-elected Brexit Party MEP representing the West Midlands, said the what the industry needed now was certainty.
“For too long we have been stuck in limbo,” he added.
“With adequate support and leadership from the Government, the British agriculture sector will thrive. We must look at the opportunity of Brexit rather than the difficulties.”